Government Funding of Airports

In the earliest years of civil aviation, no federal money went to build or operate civil landing fields. Federal money was, however, spent to map and catalog the 980 airfields in the United States that had been built by 1918 with private funds. The government's main financial support for aviation came through the purchase of military aircraft and through the military airfields that the government had constructed, especially during World War I. The government also began airmail service in 1918.

As airmail grew, the U.S. government became more involved with airports. The Post Office began investing in air stations to support the transcontinental air route in the early 1920s. The Air Commerce Act, signed by President Calvin Coolidge on May 20, 1926, made it the duty of the Secretary of Commerce to “promote air commerce.” with provisions for: the licensing, inspection, and operation of aircraft; the licensing of pilots and of mechanics engaged in aircraft work; and the operation and extension of the airways system begun by postal authorities. The Act, however, specifically barred the use of federal money for building or maintaining airports. Despite this limitation, the growth of aviation encouraged by the Act led to more private airport development.

During the Great Depression, the Federal Government began massive funding for civil works as part of its effort to create jobs and stimulate the economy. Many of these projects involved airport construction. The Civil Works Administration and later the Federal Emergency Relief Administration spent $11.5 million by the spring of 1934 on labor for 943 airport projects in small cities that established 585 new airports. Aviation regulatory agencies cooperated with these programs. Use of federal funds for constructing landing areas “reasonably necessary for use in air commerce or in the interests of national defense” continued to be allowed.

In September 1939, war broke out in Europe, prompting Congress to appropriate $40 million for Development of Landing Areas for National Defense (DLAND). Under DLAND, the Secretaries of War, Commerce, and the Navy approved expenditures for airports. By 1941, the Army Air Corps had begun directing aid to 986 airports. The Civil Aeronautics Administration (CAA) spent $363 million to construct and repair airfields in the United States, with many designed for civil aviation use after the war. Following World War II, 500 of these airports were declared surplus and turned over to cities, counties, and state sponsors to manage.

For defense purposes, CAA in 1941 extended its air traffic control system to include operation of airport towers. This function became a permanent federal responsibility in the postwar era.

In 1944, CAA submitted a National Airport Plan that helped spark Congressional interest in meeting postwar airport needs. After debating the issue, Congress passed the Federal Airport Act, signed on May 13, 1946, by President Harry S Truman. The Act provided for $500 million in grants for airport projects paid over seven years. The maximum federal grant for an eligible project would provide half of the project's costs. Local airport sponsors would issue bonds to finance the rest of the cost. All projects had to meet CAA standards for location, layout, grading, drainage, paving, and lighting. Further, all tax money collected by local governments for aviation facilities or fuel had to go for airport operations and maintenance.

In 1950, the Federal Airport Act was extended to 1958. Only runways and taxiways were eligible for federal money. Local sponsors were responsible for terminal buildings and equipment. On August 3, 1955, President Dwight Eisenhower signed Public Law 84-211, which included a new four-year program that committed $63 million of federal money each year. At the end of this period, another bill continued the money for two more years. Additional amounts were appropriated annually until 1970 when the Federal Airport Act was repealed, and the Airport and Airway Development Act of 1970, signed by President Richard Nixon on May 21, 1970, became law.

Title I of the Act provided for, among other things, $250 million annually for the “acquisition, establishment, and improvement of air navigational facilities” and security equipment for the next ten years. Title II created what was popularly called the “aviation trust fund,” financed by an eight percent tax on domestic passenger fares, a three-dollar surcharge on passenger tickets originating in the United States, a tax of seven cents per gallon on gasoline and jet fuel, a five percent tax on airfreight waybills, and an annual registration fee and charge per pound for aircraft.

On July 12, 1976, President Gerald Ford signed amendments to the law that increased the taxes levied. Now, eligible projects included snow removal, equipment to reduce aircraft noise, physical barriers and landscaping, and the purchase of land to meet environmental needs. Federal money could now pay for 90 percent of the costs of certain airport projects. This and later amendments also raised the amount of money available to airports.

By 1980, the aviation trust fund had received about $13.8 billion but only $4.1 billion had been spent on the airport system. Many parties were fighting over how the money from the fund should be spent, so most of the money remained unused. The U.S. Treasury on occasion has “tapped” the fund to use the money for projects unrelated to airports.

The Airport and Airway Improvement Act of 1982 raised taxes on aviation fuel and led to the Airport Improvement Program (AIP). It funds the construction of runways, taxiways and parts of terminal buildings and the purchase of land. It also funds automated weather observing systems, various safety-related equipment, and airport planning and noise studies. The AIP was amended several times, including in 1987, to favor small and disadvantaged businesses and individuals.

Around the world, today's airports may be operated by a national airport authority or transportation department, local authorities, airlines, private owners, or contractors. In the United States, most funds for new airports come from the sale of bonds managed by a local authority or sponsor. In the last decade, about $45 billion of AIP money has been spent with about 80 percent going to airports with scheduled air service, though like earlier programs, there continues to be disagreements and even lawsuits over how to spend the aviation trust fund. 

References:

Bilstein, Roger E. Flight in America, From the Wrights to the Astronauts. Revised edition. Baltimore: Johns Hopkins University Press, 1994.

Greif, Martin. The Airport Book, From Landing Field to Modern Terminal. New York: Main Street Press, Mayflower Books, 1979.

Horonjeff, Robert and McKelvey, Francis. Planning & Design of Airports. New York: McGraw-Hill Book Company, 1983.

Wells, Alexander T. Airport Planning & Management. Blue Ridge Summit, Pa.: Tab Books, 1992.

FAA Airports 50^th Anniversary.” http://www.faa.gov/arp/annivers.htm.

“Milestones in Federal Aid to Airports.” http://www.faa.gov/arp/anniv01.htm.